Category Archives: Cryptocurrency

New York Attorney General Sues to Shutter Cryptocurrency Trading Firm Coinseed

By Christopher Bosch on February 26, 2021 Posted in Cryptocurrency

The Office of New York State Attorney General Letitia James (“NYAG”) has filed a lawsuit to shut down technology company Coinseed. The state has accused the firm of selling unregistered securities in the form of digital tokens and operating as an unregistered broker-dealer while making material misrepresentations about the company, its management team, and fees charged to … Continue Reading

FinCEN Announces Intention to Require FBAR Reporting of Crypto Currency

By James Gatto on January 28, 2021 Posted in Cryptocurrency, FinCEN, Regulatory

FinCEN has issued a notice that it intends to amend the regulations implementing the Bank Secrecy Act (BSA) regarding reports of foreign financial accounts (FBAR) to include virtual currency as a type of reportable account under 31 CFR 1010.350. Currently, the Report of Foreign Bank and Financial Accounts (FBAR) regulations do not define a foreign … Continue Reading

Office of the Comptroller of the Currency Affirms Authority of a National Bank to Provide Cryptocurrency Custody Services

By Shane Killeen and Sarah Aberg on July 31, 2020 Posted in CryptoAssets, Cryptocurrency, FinCEN, Regulatory, Virtual Currency

The Office of the Comptroller of the Currency (“OCC”) recently signaled its approval for banks to fully wade into the cryptocurrency custodian space. On in a July 22, 2020 interpretive letter, the OCC concluded that a national bank may provide cryptocurrency custody services on behalf of its customers, including by holding the unique cryptographic keys … Continue Reading

Fans Get Kick Out of FC Barcelona’s Crypto-based Fan Token

By James Gatto on June 23, 2020 Posted in Cryptocurrency

As another example of crypto tokens going mainstream, team Barcelona sold 1.2 million euro worth of fan tokens in less than two hours. The 600,000 tokens were sold at a fixed price of 2 euro, and are tradeable on Socios.com and Chiliz.net. The crypto tokens, called $BAR, provide fans various types of engagement with the … Continue Reading

The United States-Mexico-Canada Agreement – Paving the Way for a Cross-Border Fintech Sandbox

By Emilio Cazares and Curtis Dombek on May 27, 2020 Posted in Bitcoin, Cryptocurrency, FinCEN, Regulatory, Virtual Currency

Key Takeaways The United States-Mexico-Canada Agreement (USMCA) provides for financial and digital trade regulations that harmonize the treatment of fintech companies. North American companies leveraging digital assets for payments should consider strategic regional opportunities available under the new USMCA fintech Framework. The USMCA Parties (member countries) continue to license fintech companies using cryptocurrency and create … Continue Reading

FinCEN Director Addresses COVID-19 Related Virtual Currency Issues at Consensus Blockchain Conference

By Sarah Aberg and Shane Killeen on May 20, 2020 Posted in Cryptocurrency

On May 13, 2020, Financial Crimes Enforcement Network (“FinCEN”) Director Kenneth Blanco delivered remarks to the Consensus Blockchain Conference regarding the agency’s recent observations in connection with virtual currencies, including the current risks of criminal exploitation of virtual currency, significant issues FinCEN anticipates for virtual currencies in the future, and the industry’s compliance with the … Continue Reading

Cryptocurrency Miners I“rate” At Energy Rate Decision

By James Gatto on March 30, 2020 Posted in Cryptocurrency

A Washington state federal court recently addressed claims relating to rates that cryptocurrency mining companies pay for electricity in Grant County, Washington. The court rejected all of the miner’s legal claims. The dispute focused on the rate classification that this utility applied to crypto miners as explained below. Due to various risks, the electric utility … Continue Reading

Blockchain Technology Continues to Support a Flourishing Music Industry

By Sidney Fohrman on October 25, 2019 Posted in Blockchain, Cryptocurrency

For the first time since 2007, the Recording Industry Association of America is reporting that the United States retail music market is on its way to becoming a $10 billion market. Streaming royalties account for a majority of this growth along with new use cases entering the marketplace. New technologies and content offerings have and continue … Continue Reading

FinCEN – We Will Identify Where Compliance Is Not Taking Place And Take Appropriate Action

By James Gatto on May 14, 2019 Posted in Bitcoin, Blockchain, CryptoAssets, Cryptocurrency, FinCEN, Initial Coin Offerings, Regulatory, Virtual Currency

Last week we reported that FinCEN had issued new guidance addressing cryptocurrency and other convertible virtual currency. The need for compliance was reinforced this week. In a speech by Sigal Mandelker, Under Secretary for Terrorism and Financial Intelligence, during blockchain week in NY, a stern warning was issued. The message was clear. Regulatory compliance is … Continue Reading

FinCEN Updates Guidance on Crypto

By James Gatto on May 10, 2019 Posted in Bitcoin, Blockchain, CryptoAssets, Cryptocurrency, FinCEN, Initial Coin Offerings, Regulatory, Virtual Currency

FinCEN has issued 2 new guidance documents addressing cryptocurrency and other convertible virtual currency (CVC). The guidance does not establish any new regulatory expectations. Rather, it consolidates current FinCEN regulations, guidance and administrative rulings that relate to money transmission involving virtual currency, and applies the same interpretive criteria to other common business models involving CVC. … Continue Reading

What Game Companies Need to Know About FinCEN’s Updated Guidance on Virtual Currency

By James Gatto on May 10, 2019 Posted in Cryptocurrency, FinCEN, Virtual Currency

FinCEN has issued updated guidance addressing the use of crypto currency and other convertible virtual currency (CVC). A portion of this guidance addresses the use of CVC in games. The guidance does not establish any new regulatory expectations. Rather, it consolidates current FinCEN regulations, guidance and administrative rulings that relate to money transmission involving virtual … Continue Reading

New Effort to Exempt Crypto Currency from Certain SEC, Tax and Other Regulatory Burdens

By James Gatto on April 16, 2019 Posted in Cryptocurrency, Regulatory, SEC

A new bill, the Token Taxonomy Act was introduced to congress to amend the Securities Act of 1933 and the Securities Exchange Act of 1934 to exclude digital tokens from the definition of a security, to direct the Securities and Exchange Commission to enact certain regulatory changes regarding digital units secured through public key cryptography, … Continue Reading

SEC Issues First No Action Letter on Crypto Tokens

By James Gatto on April 9, 2019 Posted in Cryptocurrency

On April 3, 2019, the SEC issued its first no-action letter for a crypto token! This is a significant step in providing regulatory clarity for when a token is NOT a security or at least when the SEC will take no action on enforcement. The same day it also issued Framework for “Investment Contract” Analysis … Continue Reading

Blockchain Games and Collectibles – Patents and Other Legal Issues

By James Gatto on March 19, 2019 Posted in Blockchain, Cryptocurrency, SEC

The use of blockchain (or distributed ledger) technology for games (a.k.a blockchain games) and token-based digital collectibles is on the rise. The overnight popularity of CryptoKitties was as significant to raising the awareness of digital collectibles as Pokémon Go was to location-based AR games. However, the ecosystem extends well beyond CryptoKitties, and is growing rapidly. … Continue Reading

Security Tokens — A Superior Platform for Securities Holding and Trading

By James Mercer and James Thompson on November 30, 2018 Posted in Blockchain, CryptoAssets, Cryptocurrency, SEC

The use of digital securities or security tokens has coincided with the explosion of crypto-currencies and efforts to establish Internet-traded coins or tokens with utility as a form of currency. Lost amidst the enthusiasm over the revolutionary implications of crypto-currencies is the simple fact that security tokens which use block-chain technology and smart contracts have … Continue Reading

Crypto Firms Make Inroads with State and Federal Regulators

By Jeff Kern and Christopher Bosch on November 7, 2018 Posted in Blockchain, Cryptocurrency, Regulatory

Over the past couple of years, the crypto industry has come under heavy scrutiny from skeptical regulators seeking to root out fraud and protect investors amid the initial coin offering boom that generated over $4 billion in 2017. However, this skepticism is starting to give way to a more business-friendly attitude. Crypto firms have made … Continue Reading

Our Music Festival- Empowering a Decentralized Fanbase with Blockchain

By Alexandra Bear on November 1, 2018 Posted in Cryptocurrency, Virtual Currency

Distributed ledger technology is continuing to be thought of as the technology that can address some of the issues that plague the music and content-creation space. Our Music Festival (“OMF”) is relying on this technology to develop a music festival and fan-interaction network that will be powered by its currency token, known as an “OMF … Continue Reading

CFTC Cryptocurrency Enforcement Receives Further Judicial Support

By William Kane on October 10, 2018 Posted in CFTC, Cryptocurrency

The Commodity Futures Trading Commission (“CFTC”) obtained an important court win and boost to its regulatory authority over Cryptocurrencies this month. A federal district court in Massachusetts recently issued a decision in CFTC v. My Big Coin Pay Inc. which affirmed the CFTC’s position that all virtual currencies are commodities and subject to CFTC jurisdiction.[1] … Continue Reading

Airdrop of Crypto Tokens Hits Regulatory Flak

By Robert Wernli, Jr., Robert Weber and Osama Khan on August 28, 2018 Posted in Cryptocurrency, Initial Coin Offerings, Regulatory, SEC

On August 14, 2018, the U.S Securities and Exchange Commission (“SEC”) issued a cease and desist order (the “Tomahawk Order”) against Tomahawk Exploration LLC (“Tomahawk”) and David Thompson Laurance (“Laurance”) for their actions in connection with an initial coin offering of digital assets called “Tomahawkcoins” or “TOM” (the “Tomahawk ICO”). Tomahawk and Laurance’s actions were … Continue Reading

Court Rules Cryptocurrencies Can Be Regulated By The CFTC As Commodities

By James Gatto and Andrea Cataneo on August 24, 2018 Posted in CFTC, Cryptocurrency

The regulatory landscape surrounding cryptocurrency continues to evolve. Most of the activity to date has involved regulatory enforcement actions brought by the Securities and Exchange Commission (“SEC”) and Commodity Futures Trading Commission (“CFTC”) and focused primarily on exposing fraud rather than providing guidance. Some people have questioned whether the CFTC has jurisdiction in this space. … Continue Reading

Is there a Unicorn Among ICO Issuers?

By James Gatto on August 23, 2018 Posted in Blockchain Games, Cryptocurrency, Initial Coin Offerings

The United States Securities and Exchange Commission (“SEC”) has indicated that nearly all initial coin offering (“ICO”) filings they have seen are securities offerings. Based on this expansive view, it may be more likely to find a Unicorn than an ICO that is not a securities offering. Ironically, a recent lawsuit was filed against Unikrn, … Continue Reading

SEC Blockchain and Crypto Update

By James Gatto on August 6, 2018 Posted in Blockchain, Cryptocurrency, SEC

The SEC has been busy over the past couple of weeks addressing blockchain and crypto-related issues. ETF Activity The SEC rejected, for a second time, a request by the Winklevoss brothers for a Bitcoin exchange-traded fund. The primary reason given by the SEC was that the submission did not sufficiently explain how the ETF would … Continue Reading

Apple Updates Cryptocurrency Aspects of App Store Review Guidelines

By James Gatto on August 2, 2018 Posted in Cryptocurrency, Initial Coin Offerings

Apple’s App Store Review Guidelines have been updated to address various aspects of cryptocurrency. Some of the relevant provisions include the following. One of the provisions relates to prevents an app from including ads that run background processes such as crypto mining. This is a tactic that has arisen, unbeknownst to many users. The relevant … Continue Reading

New York’s AG Enters the Cryptocurrency Ring as Federal, State Authorities Find Regulatory Footing

By Jeff Kern and Christopher Bosch on May 1, 2018 Posted in Blockchain, Cryptocurrency, Regulatory

On April 17, 2018, the New York State Attorney General (“NYAG”) sent a “Virtual Markets Integrity Initiative Questionnaire” to 13 companies operating virtual currency trading platforms. The questionnaire consists of 34 questions covering a number of topics, including ownership and control, operation and fees, trading policies and procedures, outages and other suspensions of trading, internal … Continue Reading